SAMINT-MILI-21048

Master’s Thesis 30 credits

Month Year

Digital Marketing and Small

Business
Case Study: LocalDeals, Stockholm, Sweden

John Joseph

Master’s Programme in Industrial Management and Innovation

Masterprogram i industriell ledning och innovation
 Abstract
Digital Marketing and Small Business

John Joseph

Faculty of Technology
Digitalization has changed the ways business operates nowadays, and because
Visiting address:
Ångströmlaboratoriet of the change, many startups are creating many services to help customers
Lägerhyddsvägen 1 enhance their business. However, the customers are becoming more aware of
Postal address: companies and their approach to creating value for them. The development of
Box 536 various technologies has caused this tide to shift. So firms cannot create a
751 21 Uppsala service without understanding what the customer expects from firms.
Telephone:
+46 (0)18 – 471 30 03 LocalDeals is a startup company that provides business owners services to
Telefax: enhance their reach for gaining more customers. The company created a
+46 (0)18 – 471 30 00 marketing channel in the form of a website. The startup is in its early stages,
Web page: and they want to understand the perspective of the shop owners in Uppsala.
http://www.teknik.uu.se/education/ This research aims to understand how value can be co-created for small
business owners in Uppsala. To understand how value can be co-created, three
theoretical perspectives were chosen Digitalization, Value, Value co-creation.

The research was carried out as a qualitative study. A purposive sampling

method was carried out to select the shops in Uppsala. To understand the shop
owners, 12 interviews and an interview with the founder of LocalDeals were
carried out. The data was analyzed by thematic analysis and Identified eight
themes – Price & Quality, Trust, Interactions Marketing, Knowledge gap, Open
to collaboration, Customers, and Promises not delivered.

The study found out that the shop owners in Uppsala have trust issues with
digital service providers approaching them. If the case company can establish
trust and have the resources to help small buissness, only then Value can be
co-created for the small buissness owners in Uppsala.

Supervisor: Yasith Wickramasinghe

Subject reader: Peter Birch
Examiner: David Sköld
SAMINT-MILI number goes here
Printed by: Uppsala Universitet
Popular Science Summary

The purpose of this study is to understand how small businesses work with digital marketing.
The case study is done for a startup called LocalDeals. This is a company that focuses on
providing services for small shop owners in a particular city. The startup is in its early stages,
and they have created a marketing channel in the form of a website for the shop owners to
enhance their reach. They started this service because the company’s founder found out that
the shop owners struggle to promote their products and deals to their customers. Many startups
provide various services to help businesses be more effective in today’s society caused due to
Digitalization.

As a researcher, I was set out to understand if small business owners want such digital ser­
vices to help them. Three theoretical perspectives were chosen to understand small business
owners: Digitalization, Value, and Value Co­creation. Digitalization is recognized as one of the
factors changing the trends in society, and it has caused the rise of digital technologies like social
media, the internet etc. The concept of value and Value Co­creation has multiple definitions,
and each time the definition and the meaning are interpreted differently by different authors.
Value can be defined as the benefit that the customer or the individual will get from a product
or a service. Value Co­creation is defined as the collaboration between the company and the
customer to reach a common goal.

The study was carried out as a qualitative study, and the shop owners in Uppsala were the
target group. The shops were chosen strategically in the form of purposive sampling. The
number of shop owners who were interviewed was 12, and the founder of Localdeals also was
interviewed. The shop owners were informed of the study’s purpose, and they were also asked
for their consent while interviewing. The interviews were recorded using the phone recorder and
later was transcribed. The data were analyzed with the help of thematic analysis. This analysis is
helpful to find similarities between the interviews and code it to a theme. The themes identified
were Price and Quality, Trust, Interactions Marketing, Knowledge gap, Open to collaboration,
Customers, and Promises not delivered.

The results pointed out that the shop owners have trust issues with various digital service
providers approaching them. If the case company can establish trust and check if they have the
resources to help small business owners in doing do the shop owners will be open to collaborat­
ing with digital service providers, and value can be co­created.
Acknowledgement

First, I would like to thank God for the opportunity to conduct my thesis for my final degree
project. Secondly, I want to express my gratitude towards Yasith Wickramasinghe for the op­
portunity to do my thesis for LocalDeals. Thirdly, I would like to thank my Subject Reader,
Peter Birch, who guided and helped me throughout the thesis, without whom this thesis would
not have been possible. Lastly, I would like to thank each shop owner for their time and patience
to be interviewed despite the pandemic outbreak. A special thanks to Uppsala university and
the examiner David Sköld.
Contents

List of Figures 5

List of Tables 5

1 Introduction 1

1.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.2 Problem Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.3 Aim and Research Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1.4 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1.5 Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2 Literature Review 7

3 Theory 11

3.1 Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

3.2 Value Co­creation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

3.3 The spheres of value creation . . . . . . . . . . . . . . . . . . . . . . . . . . 14

4 Methodology 17

4.1 Research Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

4.2 Research Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

4.3 Research Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

4.4 Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

4.4.1 Area of Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

4.4.2 Literature Review & Theory . . . . . . . . . . . . . . . . . . . . . . . 20

4.4.3 Respondents Selection . . . . . . . . . . . . . . . . . . . . . . . . . . 20

4.4.4 Interview Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

4.4.5 Interview Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

4.4.6 Recording And Transcription . . . . . . . . . . . . . . . . . . . . . . 23

 4.4.7 Ethical Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . 24

4.5 Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

5 Analysis & Results 26

5.1 Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

5.2 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

5.2.1 Price and Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

5.2.2 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

5.2.3 Interactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

5.2.4 Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

5.2.5 Knowledge Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

5.2.6 Open to Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . 41

5.2.7 Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

5.2.8 Promises not Delivered . . . . . . . . . . . . . . . . . . . . . . . . . . 44

6 Discussion 46

7 Conclusion 52

8 References 54

9 Appendix 59

9.1 A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

9.2 B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
List of Figures

1 The spheres of value creation proposed by: (Grönroos and Voima, 2012) . . 14

List of Tables

1 Theme 1 : Price and Quality . . . . . . . . . . . . . . . . . . . . . . . . . . 26

2 Theme 2: Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

3 Theme 3: Interaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

4 Theme 4: Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

5 Theme 5: Knowledge Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

6 Theme 6: Open to collaboration . . . . . . . . . . . . . . . . . . . . . . . . 31

7 Theme 7: Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

8 Theme 8: Promises not delivered . . . . . . . . . . . . . . . . . . . . . . . . 33

9 Interview Questions (Shop Owners) . . . . . . . . . . . . . . . . . . . . . . . 59

10 Interview Questions for the founder of LocalDeals . . . . . . . . . . . . . . . 60

1 Introduction

1.1 Background

The internet made its presence felt in the 1990s and created a wave of destruction which affected
how businesses operated worldwide (Desouza, 2005). The development of digital technologies
has changed the ways in which the products were being sold traditionally (Ritter and Pedersen,
2019). According to Kotler and Keller (2016) digital technology has changed customer rela­
tionships in a way that consumers are more skeptical about using products and services. Many
companies focus on digital media since consumers have become more comfortable using digital
channels to buy, sell and gain information about a specific product or service. According to the
authors, digital advertising has outgrown traditional media. In 2013, it surpassed tv advertising
by $42.8 billion. Social media has helped marketers to market cost­effectively and promote
word of mouth in the market. Consumers are more engaging with social media compared to
consumer goods. According to the authors, word of mouth is a powerful marketing tool. Con­
sumers pass on their positive and negative experiences by word of mouth. It is pointed out that
some brands are built from the effectiveness of word of mouth (Kotler and Keller, 2016).

According to Apăvăloaie (2014), many companies had to adopt various internet strategies
to survive in the environment to keep their business afloat. The era of digital technology has
shown its importance and proved to be the driver of growth of the company and competitiveness
in the market (Apăvăloaie, 2014). If businesses do not take the necessary steps to adopt various
technologies can lead to businesses not surviving in the market. According to Ritz et al. (2019),
digital channels have changed the game in how marketers communicate in today’s environment.
The author points out that the marketers have realized the positive impacts that social media
platform brings, such as Instagram, Facebook, etc. The ability to help businesses with the help
of technology is accelerating, thereby providing better results for businesses to grow and create
new forms of value (Wilburn and Wilburn, 2018). Kotler and Keller (2016) pointed out that
traditionally, advertising is not as effective as it used to be, and marketers are trying to advertise
using digital media, podcasts, blogs, and emails. Digital media has given marketers a new
platform to interact with customers and consumers more effectively.

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 Many companies are incorporating their marketing plans with digital media strategies and
are trying to balance traditional marketing strategies and digital media strategies. With the rise of
digital technology, there is a rise in informed consumers, and these consumers want companies to
listen to their wants and respond to them and not just connect with consumers. The authors point
out that digital strategies will be an essential factor in various markets due to smartphones’ rapid
growth, which is used as a primary source of communication. Millennials have been exposed
to the internet and social media platforms very early in their lives, and they trust the people they
know for information more than corporate sources (Kotler and Keller, 2016).

A study conducted by Füller et al., (2009) mentioned that consumers are more empowered
due to the development of the internet and the importance of consumers participation in the co
creation process. The empowerment of consumers is caused by the power of the internet, the
consumers do not just observe reality but also create one for themselves and have a perception
in mind. They claim that by making consumers a part of the creation process will lead to a
better experience for both the consumer and the provider (Füller et al., 2009). Prahalad and
Ramaswamy, (2004) pointed out that businesses have become more informed because of the
development of the internet, and they have enough knowledge to question the service that is
provided by companies, which is influenced by the development of various technologies. This
poses a challenge for startups where they must convince the business owners that they can pro­
vide value for their business since they are more aware about the surroundings (Prahalad and
Ramaswamy, 2004).

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1.2 Problem Description

Many startups are coming up with various digital marketing services with an intention of helping
small businesses. But, many startups fail to help these businesses since they either try to exploit
or they do not have the resources to help the consumers (Shahat and Siam, 2018). Digitalization
is recognized as a phenomenon responsible for changing the ways society and businesses oper­
ate (Parviainen et al., 2017). Many authors have studied digitalization, and it has been a popular
study over the last decade. Despite being investigated by multiple authors, many interpretations
of digitalization are moving away from the essence of the subject (Ritter and Pedersen, 2019).
According to Ritz et al. (2019), digital channels have changed the game in how marketers com­
municate in today’s environment. The author claims that marketers have realized the positive
impacts that digitalization brings to business such has social media platforms.

This thesis studies digital marketing by examining the case of LocalDeals, a start­up digital
marketing platform based in Uppsala, Sweden. LocalDeals is a startup company created in
2019, the company provides services to local businesses such as marketing services. The master
thesis is conducted for this case company. The company’s goal is to create awareness for local
businesses in a particular city by helping them to have better visibility for their customers. To
develop more visibility for the shop owners, the company made a marketing channel in the
form of a website. Currently, the founder operates the startup by himself, and there are not any
employees because this startup is in its infant stages.

Understanding Value has been a challenge in marketing research since there are multiple
frameworks, conceptualization which does not capture the construct of value (Smith and Col­
gate, 2007). A study conducted by Paananen and Seppänen (2013) to review the Value Co­
creation literature and concluded that customer value remains theoretically under constructed,
leaving room for further development. The concept of Value Co­creation can be misinterpreted,
leading to challenges in businesses (Paananen and Seppänen, 2013). Service is intangible, and it
can be as simple as helping one entity with the help of the provided resources (Vargo and Lusch,
2004). Understanding the value creation process will help provide a service that will benefit the
customer by delivering higher customer value. The complexity of understanding value is still
evident (Ulaga, 2003). The emerging interest in how interaction affects value creation is to be
explored more in­depth (Rivière and Mencarelli, 2012).

The concept of Value Co­creation in the last few years is on the rise in academic marketing.
Currently, there are numerous literature on Value creation and co­creation of value (Grönroos,
Strandvik, and Heinonen, 2015). But it has been demonstrated that the concepts of value creation
and co­creation literatures have a dim view on Value (Grönroos and Voima, 2012).

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 The theoretical concept of Value and Value Co­creation has been studied, but it is argued
that more research is necessary empirically (Vargo and Lusch, 2004; Lusch, Vargo and O’Brien,
2007; Grönroos and Voima, 2012; Grönroos, 2008). The concept of Value Co­creation does
not capture the construct of value, and the literature on Digitalization, Value, Value Co­creation
leaves room for development (Paananen and Seppänen, 2013; Vargo and Lusch, 2004; Lusch,
Vargo and O’Brien, 2007; Grönroos and Voima, 2012; Grönroos, 2008; Smith and Colgate,
2007; Ritter and Pedersen, 2019).

To use the service provided by LocalDeals the customers must pay a subscription fee to use
it. Since the case company is in its early stages, they have not decided on the service subscription
price for the shop owners. Since this is a set of new potential customers that they are targeting,
it is better to understand the small business owners before coming up with the price. The case
company has realized that they are struggling to find the intended target customer. The existing
customers are single entrepreneurs who sell their products through the service provided by them.
The service that LocalDeals offer is to promote the local promotions online and bring more
visibility for the customers who have signed up with them.

The problem is that Facebook and other social media platforms pose a threat to the company
since they do not have the resources of their caliber. The company realized that they needed to
find a new set of customers since these giant corporations dominate the current market. If they
do not, they can potentially put LocalDeals out of business. The intended customers they want
to target are business owners who own a physical store it is pointed out by the case company
that the shop owners find it hard to promote their deals, and the visibility of such deals is low.

To understand how they can expand and target small businesses owners it is necessary to
understand how small businesses use digital marketing. In doing so, it will help understand
their expectations from startups like LocalDeals that provide services for digital marketing. In
understanding their perspective on digital marketing will help gain information on how value
can be co­created for small businesses. The theoretical perspectives that are chose to understand
small businesses are – Digitalization, Value and Value Co­creation and the study is aimed to
contribute to these areas. In doing this study will give LocalDeals information about the future
to help them develop different strategies to effectively provide the necessary service to the shop
owners.

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1.3 Aim and Research Questions

The purpose of this study is to understand how small businesses work with digital marketing.
The study aims to explore the connection between digital marketing service providers and small
business. Doing so will help identify the various activities that are expected out of companies
like LocalDeals. The research questions that are presented below is derived from reading vari­
ous literature and the process of how the research question was constructed is discussed in the
literature review and theory section of this study.

1. How do small businesses perceive digital marketing?

2. How important is trust to the customers of digital marketing providers?

3. How do digital marketing providers interact with small businesses?

1.4 Limitations

Access to records such as the company’s history or a company report was non accessible be­
cause these data do not exist since it is a new startup. The study focuses on the concept of
value, Value Co­creation, and service­dominant logic, which is only focused on Uppsala’s shop
owners. These concepts can be used in different ways, and this approach was chosen to un­
derstand the shop owners. Due to the pandemic, many shop owners in Uppsala were hesitant
to be interviewed. There were language barriers between the shop owners, and the questions
had to be repeated for the shop owners while interviewing. The selected shop owners that were
interviewed were chosen for this study, and the selection might be biased. The shop owners felt
uncomfortable when they were approached initially, which might have caused them to answer
the questions in a biased way.

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1.5 Outline

This paper consists of seven main chapters. They are presented below:

Chapter 1: Introduction

The introduction chapter gives an overview for the reader of the research field and an intro­
duction of the topic in focus. The background to the topic will first be presented, followed by
a problem description. Thirdly, the purpose of the study is presented, and the research question
is given, and the last section which consists of the limitations.

Chapter 2: Literature Review

In this section of the chapter, it provides a review of current research in the field of Digital­
ization.

Chapter 3: Theory

In this section of the chapter, it provides a presentation of current research theories in the
field of marketing that is relevant for this study.

Chapter 4: Methodology

The methodology chapter explains the research method, research strategy, and design used
for this study. The study aims to explore the connection between digital marketing service
providers and small business by explaining the philosophical assumption considered for the
study, followed by the research design. Furthermore, outlining the choice of methodology.

Chapter 5: Analysis & Results

In this section of the chapter, it outlines the theme generation process and the results of the
findings that were found after thematic analysis .

Chapter 6: Discussion

In this chapter the overall findings are compared with the existing literatures and the research
questions are answered.

Chapter 7: Conclusion

In this chapter it focuses on the summary of the results and implications.

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2 Literature Review

The use of various digital technology in the market has changed how businesses operated (Rit­
ter and Pedersen, 2019). Digitalization has impacted how products are being sold in the market
(ibid.). According to Gartner (2012), digitalization is defined as the use of various technologies
to generate new ways of producing revenue (Gartner, 2012). According to Vargo and Lusch
(2004), the market was first dominated by goods traditionally, but this traditional view has tran­
sitioned from a goods dominant view to a service dominant view. The goods’ dominant view
consisted of various tangible resources, and these are the resources that a person can see and
feel. The transactions were separate in nature which is considered central to this view. Whereas
the service dominant view consists of intangibility, the resources that cannot be seen or felt,
such as relationships and interactions, are considered the central concept. The authors believed
that in the past decade’s new ideas have been evolving over the years, focusing on relationships,
co creation of Value, and intangible resources (Vargo and Lusch, 2004). Grönroos (2006) defines
services as the process where the resource provided communicates with each other, and the cus­
tomer supports the process in a way value is created. The author points out that when it comes
to the process behind the service is to invite customers by making promises about the Value that
can be captured from the provided service. However, when it comes to service consumption, the
co creation and co production of Value occur during the consumption process (Grönroos, 2006).

According to Parry et al., (2011) Goods are defined as a physical object that is exchangeable,
tradeable in markets, organization, etc. Services are defined as intangible, heterogeneous, insep­
arable, and perishable. They pointed out that when it comes to separating products and goods,
there is no accurate definition despite the subject studied by multiple authors. They claim that
both goods and services can be traded if it involves one customer and one provider. When a
firm provides a service or a product, there is always a hidden agenda. For instance, the provider
is trying to profit or get a better reputation in society. The authors explained that the research
on products and services had not captured the essence of the definition by various researchers.
They claim that there has been a shift from a service and a product to combining both and offer­
ing more Value to the customer. They also pointed out that it is essential to work with customers
to understand both services and products and to make the best services suited by creating a value
proposition that meets their needs.

Ritter and Pedersen (2019) conducted a study that presented an overview of research on
digitalization and pointed out that the concepts of artificial intelligence, computer power, and
big data have been a subject of focus for many years in academics. The authors compared the
difference between digitalization and digitization and claim that digitalization is the result of
digitization in society.

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 In conducting this study, they suggested three perspectives in order to understand the concept
of digitalization. The first perspective suggested is that the firm should generate, transmit, and
store the data and have the necessary means to access the data. If a firm cannot do the highlighted
things, then the firm cannot extract the Value. Secondly, when it comes to digitalization is to
have permission to use the data. Firms can get permission by negotiating how the data should be
handled and the various privacy measures that should be considered with the respective partners.
The third perspective is that the firm must consider getting all the permission that is needed for
accessing the data so that they can analyze the partner’s activities. They pointed out that this
interest in academics had led to a significant trend that impacts the daily practices of businesses.
They explained that different authors had studied digitalization and digital literature, yet the
concept has many meanings that lack a good overview of the concept. Many businesses have
integrated various technologies caused by digitization (Ritter and Pedersen, 2019).

According to Parviainen et al. (2017), digitalization has been recognized as one of the signif­
icant factors changing the trends in society and business. The author conducted a study on how
to benefit from digitalization in practice. This study explored different case studies that have
been carried out in different companies. As a result, the concept of digital transformation was
understood in a way to incorporate in human society. The authors reviewed numerous existing
research papers on digitalization which incorporated digital technologies like mobile phones,
the internet, etc. In doing so, they claim that many companies are coming up with different
services to help other companies consider digitalization. However, the authors claim that these
publication sources are based on speculation and opinions, making the information unreliable
and making it hard for companies to get the appropriate data. In doing this study, they concluded
that it is just not about turning various activities into digital versions when it comes to digital­
ization. Instead, however, it is the thinking process that changes how a business uses various
digital technologies. The author points out that it is necessary to take a proactive approach for
adopting various technologies because if they do not take any action, they will remain in the
same position in the market. According to the authors, digitalization impacts all businesses,
which will keep growing in the future. By providing new services to the customers can make
various businesses more efficient. The author claims that there is no specific recipe for imple­
menting digitalization in a business. The effect of digitalization differs in different businesses
(Parviainen et al., 2017). Ritz et al. (2019) conducted a study by examining data from 250 small
businesses and their attitude towards digital marketing by exploring the outcomes and motiva­
tion of small businesses. They conducted the study by integrating a Do­it­yourself model and a
technology acceptance model.

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 The Do­it­yourself model was used because they claim that small business owners are fo­
cused on creating Value by planning and organizing themselves and participating in digital mar­
keting activities can be time­consuming and tiring. That is the reason why they used the Do­
it­yourself model, and that is to understand the participation of small business owners. The
technology acceptance model was used to predict and give information about the future about
acceptance and usage information of the technology. In doing so, they understood the behavior
of the small business owners towards digital marketing. They found out that the Do­it­yourself
model is very relevant to small business owners. The authors pointed out that the outcomes
such as a sense of control, fun, excitement, and self­improvement affected the adoption of digi­
tal marketing by small business owners. The author explains that the previous research focused
only on how technology was adopted in big companies but was not focused on small business
owners. They found out that small business owners are motivated to adopt digital marketing by
themselves (Ritz et al., 2019).

A study conducted by (Cole et al., 2017) examined how small business owners act towards
advertising, digital and social media marketing. They conducted the study by sending a survey
to 300 small business owners. They found that education played a role in advertising. They
claim that the higher an individual’s education, the lower is their interest in advertising. The
individuals who had less education were more open towards advertising. The individuals with
higher education were more skeptical about advertising because of their informed knowledge.
The authors claim that small business owners face a challenge when budgeting their finance for
advertising. Because of the lack of reliable data on the positive benefits that advertising can
bring to a business, small business owners think of advertising as a cost that they will bear and
do not see it as an investment for the future which can help them generate profits. They claim
rapid innovation in marketing due to the rise of digital and social media can measure results of
the effects of advertising more accurately. They found out that only 30.3% of small businesses
had a website. Since the world society is moving towards a digital economy and without taking
specific measures can lead to business not surviving in the environment. They claim that due to
the popularity of social media and digital media, consumers are spending more time using the
internet, smartphones, and social media platforms than traditional media such as newspapers,
radio, flyers, etc. Social media platforms such as Facebook, Instagram, etc, have allowed small
business owners to market themselves to reach their consumers. They pointed out that the more
positive attitude the small business owners had towards advertising, the more satisfied they were
about the effects advertising had on their business (Cole et al., 2017).

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 Yasmin et al. (2015) conducted a study that examined the effectiveness of digital marketing
for both marketers and firms. The authors examined 150 firms to prove the effects of digital
marketing. They examined the difference between traditional marketing and digital marketing
and pointed out the various elements and advantages of digital marketing. The authors examined
the 150 firms in the form of correlation analysis. They found that every element associated with
digital marketing, such as social media, online advertising, search engine optimization, etc, had a
positive impact on the overall sales of the firms. They claim that digital marketing is considered
an essential part of businesses nowadays. The authors point out that small businesses recognize
that adopting a digital channel is less expensive and more beneficial to promote a product or
service to the consumers. They conclude that small businesses have many ways to promote
their products through social media and digital billboards. In doing so, they understand the best
ways to provide an innovative experience for their customers (Yasmin et al., 2015).

Alford and Page (2015) conducted a qualitative study to understand the adoption of technol­
ogy by 24 small business owners. The authors first reviewed various literature on the topics of
adoption of technology by small businesses. After reviewing the literature, they conducted an
empirical study on 24 small business owners. The authors reviewed the literature in the form of
six themes. The first theme was related to the role that owners played. The second theme was
how likely is technology is going to be adopted. The third theme was about market orientation
and technology adoption. The fourth theme was on the various barriers in the adoption of tech­
nology in the market. The fifth theme was how small businesses use a just doing approach rather
than the standard way of planning. The sixth themes were on the number of studies that focused
on adopting the online marketing mix and web 2.0. The authors used these themes to under­
stand the works of literature. They found out that small business owners have a positive attitude
and genuine hunger for adopting various marketing technologies. They mentioned that business
owners are aware of the benefits and the opportunities that digital technologies can bring to their
business. In doing so, the business owners felt that it would enable them to stay ahead of the
competition if they adopted various technologies. In B2B, small business owners demonstrated
a high interest in forming relationships and collaboration, which the owners have identified as
an advantage. The authors pointed out that the owners were keen on learning from others. The
authors claim that the owners require new skill sets to overcome various barriers to technology
adoption. The rate of change of innovation when it comes to technological innovation creates
a knowledge gap for business owners. Because of that, the small business owners imitate ways
in which others use various platforms like social media for advertising. They conclude that
since the small business owners are willing to collaborate, which enhances the opportunities of
services to provide a unique experience for them (Alford and Page, 2015).

10
 The study by Ritz et al., (2019), Cole et al., (2017), Yasmin et al., (2015) and Alford and
Page, (2015) indicated that small business owners are highly motivated to use digital technolo­
gies to make their business more efficient leading to the first research question: How do small
businesses perceive digital marketing?

3 Theory

3.1 Value

According to Smith and Colgate (2007), The concept of Value Co­creation has been recognized
today as an essential factor in marketing studies. The authors point out that Customer value has
different interpretations from different authors. The two definitions that stand out to the authors
the concept of value are defined as the value perceived by the customer and the value received
by the firm (Smith and Colgate, 2007). Gummerson (1995) mentions that the customers do not
buy goods or services, but what they buy is offerings that render services, which creates Value (
Gummerson 1995). Woodruff (1997) describes the concept of customer value as “A customer’s
perceived preference for, and evaluation of, those product attributes, attribute performances, and
consequences arising from use that facilitates achieving the customer’s goals and purposes in use
situations” (Woodruff, 1997). Holbrook defines the concept of customer value as “Interactive,
relativistic preference and experience” (Holbrook, 2005). There are many interpretations of the
meaning of customer value such as what is in it for the consumers, the benefits that the customer
gets, quality of the product or service, worth of the product that is perceived by the consumer
versus what the consumer pays for, such the price, and sacrifices (Smith and Colgate, 2007).
Woodruff points out that new research methods on customer value must focus on long­term
relationships by building theory to understand how the customer perceives value (Woodruff,
1997).

According to Menon et al. (2005), the concept of customer value is considered as the corner­
stone of business management, and it is also considered an essential factor for creating customer
satisfaction. Understanding various aspects of customer value will allow firms to manage how
value can be delivered to the customer. The authors pointed out that the industrial marketing
and purchasing group expanded their research in the ’80s by analyzing various business relation­
ships and concluded that they were interactive and double­sided. Even after all these efforts to
investigate business relationships, they were not regarded as a central construct and not looked
at from a fundamental perspective.

11
 They point out that it requires organizations to have a clear picture of what value they can
bring to the marketplace, and by doing so, they would have an effective business. The authors
found out that when it comes to customers, they tend to focus more on the benefits they will
accrue from the company, less on the part of the sacrifice. They claim that the current advances
made to understand customer value are lacking and not fully developed. The literature on cus­
tomer value takes a broad view of the concept, thereby not digging deeper to understand the
nature and scope of the benefits and sacrifices. The authors claim that various aspects of cus­
tomer value in the business markets remain unclear and unexplored. One of the main findings in
the study was that “Trust” was the main driver when it came to delivering value to the customer.
It also indicated that when a customer trusts the supplier, the relationship improves the overall
business of both parties (Menon et al., 2005).

A study conducted by Paananen and Seppänen (2013) compared most of the literature on
value from different authors who had different perspectives on the concept. They pointed out
that other scholars have used the term to explain various phenomena, and the research on the
concept of value has been all over the place. Despite their efforts in analyzing multiple pieces
of literature on the concept of value, they claim that the challenging part was that different
scholars had conducted their study had different assumptions of the concept of value. They
claim that the term value is has a lot of concepts which makes it under constructed. They point
out that by conducting studies on the value, it is better to understand the concept from a human
perspective, and in that way, the results could be generalized (Paananen and Seppänen, 2013).
From the literatures that have been identified, Menon et al. (2005) indicated that it is essential to
understand the importance of trust because if the customers trust the case company, it improves
the overall business for both parties. To understand if trust plays a role, it leads to a research
question: How important is trust to the customers of digital marketing providers?

3.2 Value Co­creation

Zwass (2010) defines Value Co­creation as creating value by consumers (Zwass, 2010). Ac­
cording to Prahalad and Ramaswamy (2004), the consumers were considered outside the firm
traditionally, and the value was already decided and created by the firm without the involvement
of the consumers. But presently, the traditional mindset has changed, which was pointed out by
the authors that the consumers have become more intelligent, well informed, and connected,
which is influenced by the development of various technologies. Consumers actively learn new
ways through the developed technologies to extract the value they want from the firms. This
change has put tremendous pressure on the firms to involve the consumer in creating their ser­
vices and products.

12
 Currently, the firms cannot create a product or service without affecting the consumers’ per­
spective, and this is because the consumers have the choice in the end. The consumers decide
if they want to have a relationship with the firm based on how value is created for them. The
authors claim that the consequence of not understanding this change can be very crucial to the
firm. The firms should change their traditional mindset on how value is created for the con­
sumers and seek to co­create value with the customers. This should be done in the form of
interactions between the customer and the company, which the author suggests. If the compa­
nies do not understand this change, it can put firms out of business (Prahalad and Ramaswamy,
2004).

According to Kotler and Keller (2016), the traditional way used to be that the firm first
makes a particular product or service and then sells it. They point out that businesses must
design so that they see themselves as a part of how value can be delivered with the involvement
of the consumers. The process of value creation and how the value can be provided is split
into three phases which the author points out. The first phase is the phase where the firm must
decide on the value they want to deliver before the product exists, and in doing so, they develop
the value proposition that they want to communicate. The second phase is the value that they
want to deliver to the consumer, in which the firm identifies the product or the service features
and prices. The third phase is communicating the value by various communication tools to
get the value transmitted to the consumers. The importance of co­creation of value among the
consumers are widely growing in popularity and has become an important factor in the marketing
studies. Value is an important concept in marketing, and it is a combination of quality of the
service that is offered, and the price called as the customer value triad. Currently businesses
choose the offerings proposed by various companies based on the value that the companies can
be delivered to them (Kotler and Keller, 2016).

Grönroos (2011) studied the concept of Value Co­creation through the aspect of value by
analyzing in­depth the various roles of the customer and the firm. He points out that without un­
derstanding the concept of interactions and how interaction occurs, it cannot lead to any creation
of value. The author claims that co­creation can only occur if interactions take place between the
customer and the firm. Interaction is the fundamental construct to analyze the service as logic
for value creation. This creates an opportunity for the firm to engage itself with the customer
practices and influence their outcomes and help consumers get better value delivered (Grönroos,
2011). Grönroos (2008) explored the various consequences for value creation in marketing in
general. He explains the differences between Value in exchange and Value in use. Value in
exchange is the Value created while providing the service, and Value in use is the Value emerg­
ing after consuming the service or product. The author points out that Value in exchange is the
foundation of Value, which focuses primarily on facilitating consumers.

13
 They conclude that adopting Value Co­creation makes it possible for firms to engage with
the customer and generate Value directly. In doing so, the supplier and the customer become
a co­creator of Value (Grönroos, 2008). The studies by Prahalad and Ramaswamy (2004) and
Grönroos (2011) indicated that without understanding interactions can be very crucial to the
firm. It is essential to understand the nature of interactions since it is indicated that without
understanding the importance of interactions, it can lead to firms going out of business and it
cannot lead to any creation of value leading to the following research question: How do digital
marketing providers interact with small businesses?

3.3 The spheres of value creation

Figure 1: The spheres of value creation proposed by: (Grönroos and Voima, 2012)

The figure presented describes the value creation process which is developed by (Grönroos and
Voima, 2012). Grönroos and Voima, (2012) points out that the various activities that are involved
in the creation of value are categorized into three spheres, and they are 1. Provider sphere, 2.
Joint sphere and 3. Customer sphere. The interactions that take place within the spheres is said
to be indirect and direct interaction.

14
 The model explains the roles of the firm and the customer and how these roles change de­
pending on the value creation sphere. The firm is responsible for the development of the product
or the service that is indulged with designing, manufacturing, development, etc. By doing so,
the firm produces the necessary resources that is needed for the customer in the provider sphere
in doing so creating customer value (Grönroos and Voima, 2012).

According to Grönroos and Voima (2012); Grönroos and Ravald (2011), the firm oversees
the entire process in the provider’s sphere. This is where the potential value is generated. The
firm’s various activities result in the potential value, which is the output that the customers may
use in the creation of the value process. The provider sphere can consist of the value proposition
that the provider wants to convey to the customer (Grönroos and Voima, 2012; Grönroos and
Ravald, 2011). Kotler and Keller (2016) mention that value proposition provides a fisheye of the
benefits that the company promises to deliver. This is the promise which the customers would
experience and expect from the company. The value delivery system includes the customer’s
experience, and a good delivery system will help deliver distinctive consumer value (Kotler and
Keller, 2016).

According to Grönroos and Voima (2012); Grönroos and Ravald (2011), In the joint sphere,
the customer’s role is identified as a co­producer between the firm and as a value creator with the
firm. In this sphere, the customer oversees the creation of value. For co­creation to take place,
there must be direct interaction. If direct interactions do not take place, Value Co­creation cannot
take place. The way the firm interacts with the customer influences Value Co­creation, which
can positively or negatively affect Value Co­creation. The interaction that takes place in the joint
sphere is direct and indirect. Direct interactions are the interactions that take place between the
customer and the firm’s resources. Here the customer works with the firm’s resources to develop
and design the product. Indirect interaction refers to the interactions that take when the customer
uses or consumes the resources provided by the firm (Grönroos and Voima, 2012; Grönroos and
Ravald, 2011). According to Grönroos (2011), it is essential to acknowledge the existence of
interactions that influence value creation and the customer’s usage processes to become a Value
co­creator. Communication with customers has an important role when it comes to Value Co­
creation. The customers may be co­developer and help initiate the development of the resources,
starting the joint value creation phase. In this way, the firm can co­create value with its customers
(Grönroos, 2011).

According to Grönroos and Voima (2012); Grönroos and Ravald (2011), The customer
sphere is the sphere that is ignored traditionally, but the importance of this sphere has been
recognized in marketing. This is where the value is created for the customers, and it is entirely
independent of the other spheres. The independent value creation takes place in the form of
interactions with the resources that are obtained from the firm.

15
 The customer combines the resources that are provided, and value is created. The customer’s
sphere is known as an experimental sphere, and the value in use emerges through the experiences
of the resources provided to the customer. By analyzing the joint and customer sphere, the roles
of the customer and the provider can be understood in value creation (Grönroos and Voima,
2012; Grönroos and Ravald, 2011)

A study by Pohjosenperä and Komulainen (2020) explored the dynamics of Value Co­creation
in health care logistics with the help of the value creation sphere. They found out that the spheres
are not stable since its constantly changing, and it depends on the development of the relation­
ship between the customer and the service provider. The authors claim that Value Co­creation
takes place in the joint sphere and finding a balance between the amount of Value Co­creation
and the actor’s activities are essential (Pohjosenperä and Komulainen, 2020). Research done by
Samarov (2015) found out tha customers and the revenue can be generated if the retailers col­
laborate with their customers. In doing so they can effectively co­create value in the customer’s
sphere (Samarov, 2015).

16
4 Methodology

4.1 Research Strategy

Selecting a methodological approach for this study depends widely on the research paradigm
that the researcher chooses. Marketing research consists of three essential dimensions: ontol­
ogy, epistemology, and methodology (Blanche and Durrheim, 1999). According to Easterby et
al. (2015), ontology is defined as the nature of reality and existence. In other words, it is the
reality that the researcher observers. Epistemology is the knowledge that helps the researcher
to understand reality with a suitable approach that is needed to investigate the nature of the
world. It is essential while developing the methodology approach to draw a perspective from
different ontological and epistemological assumptions. By being aware of such philosophical
speculation, it can increase the quality of the research (Easterby et al., 2015).

The ontological position for this study is from a relativist point of view. Relativist positioning
in ontology assumes that different observers might have another point of view (Easterby et al.,
2015). The concept of value and Value Co­creation has different frameworks, and the definition
of the concepts differs in each study. But for this study, a relativist position is suitable because
this study will give LocalDeals information about the future. The problem in conducting this
study is that there is no historical data to predict what will happen in the future, which is a
natural science form of tradition for future prediction. But is it a relativist position in the sense
that different people have a different take on Value Co­creation. Since other people have a
further understanding of the concept of value and Value Co­creation, a relativist position is best
suited when it comes to ontological positioning.

To investigate the concept of value and Value Co­creation, epistemology is essential to un­
derstand the concept by enquiring into the social and physical world (Easterby et al., 2015). For
this study, it is suitable to take on a constructionism/ Interpretivist perspective. It is construc­
tionist/Interpretivist because the whole concept of Value Co­creation is understood by the model
proposed by Grönroos and Voima (2012). Using the constructed model will help understand that
different actors have different interpretations of the concepts, and their knowledge matters.

I argue that if the stakeholders realize that something is essential, and then their experience
will influence Value Co­creation. Since the case company is in its initial stages, data accessibil­
ity is a constraint. This constraint will help determine the appropriate methodological choices
that are suitable for this study. Doing so allows the research to be more natural and allows a
better understanding of the world through experiences (Kwadwo et al., 2015). Since the on­
tological position is viewed from a relativist perspective and epistemological position from an
interpretivist perspective, qualitative research is best suited in conducting this study.

17
 According to Bell et al. (2018) qualitative research is a strategy that emphasizes words
instead of numbers in collecting and analyzing the data. The theory in this type of research is
supposed to be the outcome of the concept that is being investigated. Qualitative research helps
to ask how and why, which enables the researcher to see a phenomenon and understand it by
focusing on the aspect of observation and meanings (Bell et al., 2018). To conduct qualitative
research, inductive reasoning is suited for this study. Inductive reasoning is an approach that
helps in analyzing the data and derive concepts and themes by interpreting it from the data
that is collected by the researcher (Thomas, 2006). This is best suited for this study because
conducting the study from an interpretivist point of view with a qualitative approach will help
gain in­depth knowledge to understand the subject of focus.

4.2 Research Design

The research design is a technique used for generating research evidence in the form of a frame­
work (Bell et al., 2018). The design chosen for conducting this study is a single case study de­
sign. A case study helps analyze a phenomenon or an object in detail (Bell et al., 2018). Since
the focus of this study is to understand digital marketing and small businesses by studying Lo­
calDeals, a case study is best suited. According to Easterby et al. (2015), the case study method
looks in­depth at a small number of organizations, individuals, or events over time. This study
is a single case study since it analyses one single organization, and that is LocalDeals . A sin­
gle case study is advocated to generally come from a constructionist epistemology perspective
(Easterby et al., 2015).

Case study design makes it a possibility to gather rich data through empirical means. Doing
so helps to gain a deeper understanding of the phenomena. For this research, an exploratory
case study is suitable since it explores a phenomenon that serves as a point of interest to the
researcher (Zainal, 2007). For this study, the phenomena that are of focus are Value Co­creation
and how it can be created for the new targeted customers of LocalDeals. According to Flyvbjerg
(2006), the conventional way of case study is wrong and misleading, but it is necessary for a
particular case study.

According to Zainal (2007), case studies are beneficial in research since it enables researchers
to examine the data collected at a micro­level. It is convenient to employ when a significant
sample population is hard to obtain. Case studies were criticized for their inability to generalize
the results and the tendency for the researcher to be biased. The reliability and the generality
are subjected most to skepticism when a small sample is deployed. The author concluded that
researchers deploy this study method to study real­life situations (Zainal, 2007).

18
4.3 Research Quality

The quality of the research is assessed by two essential criteria and they are reliability and valid­
ity. According to Bell et al. (2018), reliability and validity are conceptualized as trustworthiness.
Four criteria make up the trustworthiness of the research, and they are:

Credibility (Internal validity)­ The significance of credibility is based on multiple accounts

of social reality to make the research credible. By adopting triangulation, it improves the cred­
ibility of the study. Triangulation is the method that involves more than one method or source
of data to study a social phenomenon. The methods employed were semi­structured interviews;
while conducting the interviews, the participants were closely observed to validate the data.
Field notes were taken during the interview. To ensure credibility, the collected data was not
tainted and analyzed from a critical perspective (Bell et al., 2018).

Transferability (External validity) ­ How the findings the researcher presents can be ap­
plied in other contexts. A thick transferability description is suggested to improve this area,
which ensures rich accounts of the detail of the culture (Bell et al., 2018). The findings in this
study is based on the small businesses owners and the perspective of the case company. This
can be a limitation to use the findings to be compared to other contexts since the number of
participants is limited.

Dependability (Reliability) – This ensures that all the records are kept throughout the re­
search process, such as problematization, interview transcripts, data analysis, etc (Bell et al.,
2018). Different shop owners were interviewed to ensure a variety of the data that was col­
lected. The selection of the participants may have caused bias while choosing the participants
suitable for the study. It is pointed out by Bell et al. (2018) that reliability through transferability
is often very hard in qualitative studies.

Confirmability (objectivity)– It ensures that the researcher has acted in good faith and has
not allowed personal value or theoretical inclination to biases while conducting the research
(Bell et al., 2018). While conducting the research, there were no academic or personal biases
while conducting the study. The biases that might have occurred is during the selection process
of the participants that was mentioned previously.

For this study, as a researcher, I want to understand the small business owners understanding
and let them speak about their knowledge about marketing and advertising in general. By un­
derstanding the shop owners what they have to say about the concepts, the data is more credible
and valid since the data will help understand their understanding. The limitation faced is that the
number of interviewed shop owners was limited, and the startup is a one­man­owned startup,
which might affect external validity.

19
4.4 Data Collection

4.4.1 Area of Research

The study aims to explore the connection between digital marketing service providers and small
business. To understand the research questions, it is essential to understand the perspective of
the targeted customer group and their understanding of marketing and advertising. By doing
so, it will help understand the factors that influence the Value Co­creation process. The study
conducted by Füller et al. (2009) explains how consumers are empowered by the development
of technology and its influence on the decision they make while choosing a product or a service.
It is evident that the consumer creates a reality, and already the consumer has decided on what
they want from providers.

4.4.2 Literature Review & Theory

The literature review & the theory section was written by reading various studies conducted
by different researchers on digital marketing, small businesses, Value, and Value Co­creation.
The literature that was identified was in the form of a narrative approach. According to Bell
et al. (2018), it is pointed out that for conducting qualitative studies narrative approach is best
suited. By doing so helped identify the literature that was relevant to conduct this study. It was
pointed out that by adopting a narrative approach helps in forming a solid foundation to build
the research upon (Bell et al., 2018). The literatures were identified through various sources
such as Diva Portal, Springer, google scholar, etc.

4.4.3 Respondents Selection

According to Bell et al. (2018), the problem in conducting a qualitative study is to have a
sample with an appropriate size. It is difficult to predict when the limit reaches theoretical
saturation. The authors pointed out that it is essential to specify which sampling method will
be used for conducting this study. The method that is chosen for this study is in the form of
purposive sampling. The small business owners were selected in a way that they are suitable
for this study. Purposive sampling is used to collect relevant data strategically. Since the focus
population is collected in Uppsala and the targeted small business owners were strategically
chosen in Uppsala. Purposive sampling is a non­probability sample where the interviewees
are carefully selected to be suitable for the study (Bell et al., 2018). The sample size is 12
small business owners from Uppsala and one interview from the founder of LocalDeals. A brief
introduction of the shop owners of Uppsala is presented for the reader.

20
 To keep the shop owner’s identity anonymous, the names of the small business owners have
been changed. The advantage of using this sample was that there were numerous amounts of
family­owned shops around Uppsala. Due to the pandemic, many small business owners were
hesitant to be interviewed, which was a constraint in choosing this sample. But it could also be
that the small business owners felt uncomfortable being interviewed.

1) Lalo’s Bike shop (Mark)

This bike shop focuses primarily on repairing old bikes and bring the bikes to factory con­
dition. The shop is located in central Uppsala.

2) Flogsta Narliv’s (Tony)

This shop is a grocery store where the shop owners sell a variety of goods. Other than a
departmental store, it is also a postal delivery spot.

3) Amaryllis Blomsterhandel (Tuva)

This is a florist shop located in central Uppsala and the owner is a second­generation owner
of this family business.

4) Myrtos (Maria)

This shop is a Greek deli store located in central Uppsala. They sell herbs, pottery, different
mixes, cheeses, and also quick snacks from Greece.

5) V.S.Nails (Linnea)

The shop owner recently started her nail salon in Uppsala a year ago. After she got tired
from her job working in the hotel industry as a cosmetician, she started the business and decided
to open the salon in the center of the city.

6) Wizard Salon (Oscar)

This is a hair salon located in central Uppsala the owner is a second­generation owner of
this family business.

7) Café Vralet (Walter)

The shop owner has been a businessman for 10 years. He went from an employee working
in a company to starting his own café in Flogstavägen.

8) Myway (John)

This is a grocery store that sells various goods such as cigarettes, candies, and other snacks.
It is located in central Uppsala.

21
 9) Falafel king (Klara)

This business is a food truck that sells street­style falafel in central Uppsala. She started the
food truck because she used to work in a restaurant for 30 years and wanted to start her own
food business.

10) Kritikos (Jacob )

This is a shop in central Uppsala which sells honey and similar products.

11) Kafferummet Storken (David)

The owner’s father used to work in a restaurant, and as a kid, he loved food. That is the
reason why he started his own café in central Uppsala that sells baked goods.

12) Vasilis och Sigrid (Johan)

This is a shop specialized in selling high­grade olive oil. The owner’s father owned an olive
farm.

4.4.4 Interview Guide

Bell et al. (2018) pointed out that while conducting semi­structured interviews, one way of
preparing for the qualitative studies is to create an interview guide. It ensures that the researcher
will remember all the areas that have to be covered in the subject of interest. The researcher will
understand the interview participants by digging into their views on the world, which makes
the interview more flexible than structured interviews (Bell et al., 2018). I created an interview
guide to compare the results of my interviews. The interview guide was constructed in a way
that I could understand how small business owners and the case company operate. The questions
that were created was on digital services and small businesses.

The interview guide helped me to remember the questions and keep the conversation more
casual. Understanding how small business owners operate and their understanding of marketing
will influence Value Co­creation. Considering this, the interview guide was constructed, and it
is presented in the Appendix A and B. The questions that are shown are open­ended, and this
is to understand the shop owners and their understanding of the subject of focus. The interview
guide for the participants was constructed after revisiting the research question, the design of
the research, and the sampling strategy. By doing so, helped me to clarify the purpose of the
study. It is pointed out by Bell et al. (2018) that it essential to reflect on how the questions are
constructed and how they might be understood and felt by the participants.

22
4.4.5 Interview Process

According to Runeson and Höst (2008), data collection through interviews is essential while
conducting case studies. The interview was conducted in the form of semi­structured inter­
views as previously mentioned. The open­ended questions constructed in the interview guide
enabled me to have a casual conversation with the participants. In doing so, the small business
owners felt comfortable while answering the questions. The owners were not compelled to an­
swer any questions, and they had the freedom to deny any questions they felt uncomfortable.
The questions were not asked in the same order while interviewing the small business owners.
The discussion with the participant was more natural and developed room for improvisation
(Runeson and Höst, 2008). Semi­structured interviews have a high degree of confidentiality,
and the interviews tend to be more personal (Easterby et al., 2015). The small business owners
were asked if the collected data could be used for this study before conducting the interviews,
and they all permitted me to use the data. The duration of the interviews lasted between 30 – 40
minutes. At the beginning of the interview, not every aspect of the study was revealed to make
sure that the business owners would not be overwhelmed with the subject of focus. This enabled
me to talk to them as a friend. After the interview was conducted, all the details of the study were
revealed to the business owners. When it comes to qualitative studies, it is sometimes complex
in getting the appropriate data since the participants might try to give the best answer for the
study. This is a potential limitation since it might convey the wrong picture of reality. To make
sure that this does not happen, the participants were informed that they would be anonymous.

4.4.6 Recording And Transcription

The device I used to record the interview by using the voice recorder available on the mobile
phone. According to Bailey (2008), while conducting qualitative studies, it is better to use digital
audio or recorders since it would be helpful to get data that is of good quality. Taking notes when
it comes to the making of recordings is not detailed or accurate. Using an audio recorder will help
the researcher playback audio and synchronize it in a way for transcription. The author pointed
out that accessing data is an interpretative process (Bailey, 2008). The advantage I found out
while using a recorder was that it was much easier for me to playback and listen to the recordings.
The mobile phone was more compact to carry around. Because of the size of the mobile phone, it
made the participants more comfortable while interviewing. After the interviews were recorded,
the data that was collected later transcribed for further analysis. The data was transcribed using a
software called Otter Ai. The software transcribed the entire recording, and after the transcripted
data was saved in a word document to study the data further.

23
 The advantage of using the software made the transcription work much easier, but the disad­
vantage was that it misunderstood some words and made manual changes had to be carried out.
Bell et al. (2018) pointed out that it is very efficient to gather empirical data from the partici­
pants by recording the interview in the form of digital audio. The data will help the researcher
playback the audio and clarify if any misunderstandings might have occurred. In this way, the
researcher can correct the misconceptions and have the data needed to conduct the study (Bell
et al., 2018).

4.4.7 Ethical Consideration

According to Bell et al., (2018), it is necessary to get consent from the participants. Before
the interview was conducted, the participants of the study, who are the shop owners of various
businesses, were informed about the study. The participants were asked if the data could be
used for transcription and recording purposes of the research. They all agreed and gave their
consent. While conducting the interviews, it is necessary not to interfere with the participants
while they are answering. The main object for the researcher is to observe and listen. Bell
et al. (2018) point out that providing the details about the interview and a description of the
process will ensure to the shop owners that the data won’t be used for any other purposes. To
protect the identity of the shop owners, their names were changed from their original names
to the names assigned. The details about the study were not disclosed to them initially, so the
information collected will not have any biased answers. In doing so, the shop owners felt freer
while answering the questions, and they were more open about answering the questions. The
shop owners had the freedom to answer the question, and they were not compelled to answer
and questions. But after the interview, the shop owners were informed about the study.

4.5 Data Analysis

To analyze the transcribed data from the interviews, I adopted a thematic analysis approach.
Bell et al. (2018) suggest that the most common way of analyzing qualitative data is by the­
matic analysis. The transcribed data was read back and forth to find similarities between the
interviews. The audio recording was also played back and forth to recognize the recurring top­
ics that the small business owners constantly mentioned. In conducting thematic analysis, Bell
et al., (2018) said that it helps identify similarities between the conducted interviews. Braun
and Clarke (2006) pointed out that thematic analysis is a method used to identify, analyze, and
note down the recurring patterns observed. It enables the researcher to organize effectively and
describe the data that is collected with rich detail.

24
 The thematic analysis seeks to theorize the structural, socio­cultural contexts that allow the
researcher to seek through individual accounts guided through the research epistemology from
an interpretive view. The analysis involves moving back and forth constantly between the entire
empirical data and codes can be extracted (Braun and Clarke, 2006). This helps focus on the
various subjects necessary for the study (Bell et al., 2018). For conducting the thematic analysis,
I followed the six steps proposed by Braun & Clarke ( 2006), and these are:

1. Listen to the interview audio

2. Generate the code

3. Identifying similarities and patterns by analyzing the code generated

4. Theme generation

5. Providing a name to the theme generated

6. Producing the main data

In carrying out the thematic analysis, as previously mentioned, the audio was familiarized.
In doing so, I noted down the recurring topics that the owners mentioned in the interview audios.
Doing so helped me generate the initial codes. After the codes were generated, I gave the codes
a theme. By following the six steps proposed by Braun and Clarke (2006), I was able to identify
the themes identified in the following tables. The advantage of using thematic analysis is that it
provides high flexibility for the researcher, and it is pointed out by Nowell et al. (2017) that it
is easy to grasp and use. It is argued by Nowell et al. (2017) that it is a handy tool to summarize
the empirical data that is collected. These are some of the advantages that thematic analyses
offer.

The disadvantage of thematic analysis is that the flexibility that is provided can sometimes
lead to inconsistency. After the themes were identified using this analysis method. The founder
of the case company was interviewed to get his perspective on the themes that have been iden­
tified.

25
5 Analysis & Results

5.1 Data Analysis

The data was collected in the form of semi­structured interviews, and the analysis of the data was
done in the form of thematic analysis, which was previously mentioned in the methodological
chapter. The transcribed interviews were analyzed together to find the recurring patterns. The
topics that were brought up frequently were highlighted and coded to a particular theme. After
the themes were generated, the founder of LocalDeals was interviewed, and in doing so the
data that was transcribed and checked for similar patterns. The entire theme generation process
cannot be shown to the reader as it consists of a lot of data. An example of how the themes were
generated is shown below. This would help the reader to get a glimpse of the coding process
and make the data more credible. The theme generation process is limited to three interviews
per theme. Doing so will introduce the reader the thinking process that went behind identifying
the themes.

Shop owner Quotes Code Themes

Mark Price and Quality go hand in Factors
hand but the other aspect I see
is how much does the person
care about the product or ser­
vice that they are offering

Maria Sometimes you must pay for Factors Price and Quality
the high price even though I
think I don’t want to pay for
a service or product, it is all
about taking the risk and see if
it works no matter the quality

LocalDeals Value, according to me is, Factors

in two perspectives, the first
perspective is value could be
measured as Financial sav­
ings. And the second value
could be also measured as an
experience

Table 1: Theme 1 : Price and Quality

26
Shop owner Quotes Code Themes
Tuva When someone approaches Good faith
you and they say that they
can help you with a partic­
ular problem, you will have
to check up with some col­
leagues whether they deal
with good work. We don’t
like people coming in and say
we can help you with this.
And I always say, okay, no,
you must send us information.
We must check you up. We do
not say Oh, you’re welcome.
In this way we are very care­
ful with who we work with

Tony If I get an email that, for in­ Good faith Trust

stance, someone wants to co­
operate, or who has a busi­
ness offer, then I do not take
it. The most important thing
for me is trust, there must be
trust between me and the peo­
ple offering the service

LocalDeals I have to say, because most Good faith

of them have a service already
procured in one way or the
other. I think people do un­
derstand when you are run­
ning a shop, that you can­
not do everything by yourself,
that is an ecosystem that you
need to tap into. I think cus­
tomers know about their ser­
vices and they are open to it

Table 2: Theme 2: Trust

27
Shop owner Quotes Code Themes
Tony I interact face to face with my Nature of com­
customers who come to my munication
store and I always try to un­
derstand what they are look­
ing for, and by speaking with
them and I see what’s their
mood, and I try to talk to
them. Because of that, I know
their faces and they know me

Walter Honestly I use a lot of plat­ Nature of com­ Interaction

forms, through WhatsApp, munication
Facebook, Google business,
messages or through email
and through our website

LocalDeals The best way to interact with Nature of com­

the company is through email. munication
The customers should fill a
contact form that we have on
the site. If you are known,
then then you have a direct
email with a phone number

Table 3: Theme 3: Interaction

28
Shop owner Quotes Code Themes
Maria The slowest form of market­ Word of Mouth
ing is word of mouth and It
gives more of a trust. Like
you might listen to that per­
son. If he or she knows a lot
of restaurants that are good,
and I will listen to them. So
word of mouth is very impor­
tant when it comes to market­
ing

Klara when you make the best Word of mouth Marketing

falafels for people and after
that people will speak about
you and you will be known

LocalDeals Word of mouth is what goes Word of Mouth

around 90 or 80% of the time I
think what we can show to the
customer is by engaging with
us you will get a potential cus­
tomer base

Table 4: Theme 4: Marketing

29
Shop owner Quotes Code Themes
Maria I had to find new ways of find­ Additional work
ing customers. So, I have
been working on a lot on find­
ing and reaching out to my
customers. I managed to in­
crease my revenue. But it
could go better because I am
still in the beginning stages,
so I need to push it even
harder, and marketing is hard
and that is something that I
need to work on

Oscar Since I am a hairdresser, I Additional work Knowledge Gap

need to show that my work is
good since this is beauty and
art and i need to market my
skills and I do that through so­
cial media, I try my best to
promote my work

LocalDeals I researched a little bit on Additional work

the challenges that are faced
by the shop owners in gen­
eral. I found out that, a lot
of shops are being closed be­
cause they have trouble com­
peting with the digital market­
ing tools that are around

Table 5: Theme 5: Knowledge Gap

30
Shop owner Quotes Code Themes
John I work with some post ser­ Willingness
vices; other than a shop it is
also a pickup delivery spot
for many post­service compa­
nies. They are the ones that
bring in a lot of customers.
For instance, if some other
post company or some other
post­service wants to cooper­
ate, and then I will be open to
services that bring customers

Tony From my experience, we Willingness Open to collabo­

don’t work together much ration
actually. It’s like, everyone is
by themselves, and for what
you pay you to get but I am
open to working with them

LocalDeals The emotional experience Willingness

that you experience if you’re
on the on the phone or face
to face conversation with
the customer directly is
important. And in doing so
it is more valuable to them
than the fiscal experience.
By engaging with us we can
show the customer the value
that our service brings

Table 6: Theme 6: Open to collaboration

31
Shop owner Quotes Code Themes
Walter The mistake that people usu­ Nature of cus­
ally do is that they think cus­ tomer
tomers are dumb. But they are
smart, and you have to honest
with your customers

Mark if you visit the place and Nature of cus­ Customers

if you are satisfied with the tomer
place, you’re coming back
next time and you might
come back with your friend or
someone else and in the end,
it’s the customer who has to
pay. Always it’s the customer
that has the power to choose
otherwise you will go out of
business

LocalDeals The Facebook groups are Nature of cus­

formed through causes, some tomer
of the group names are small
business owners of Stock­
holm, small business owners
of Sweden and marketing
help for small business own­
ers in Sweden etc. But then
they use this platform to kind
of communicate to each other
of their products and services

Table 7: Theme 7: Customers

32
Shop owner Quotes Code Themes
Mark It doesn’t matter what they Nature of service
promise, what they deliver,
what you ask for, what they
promise, what they under­
stand and what you pay for.
And what you get is com­
pletely different which is 99%
of the times

Walter Services do not deliver what Nature of service Promises not de­
they promise, and I have a livered
hard time reaching them. I
want them to reach out to me
when I contact them. I run a
business. I can’t be like call­
ing a company like three, four
times a day, when I have so
many things to do in restau­
rant

LocalDeals LocalDeals tries to enhance Nature of service

the shop owner’s visibility
towards their customers and
tries to do this by promoting
the campaigns and the promo­
tions that the physical stores
have already

Table 8: Theme 8: Promises not delivered

33
5.2 Results

5.2.1 Price and Quality

To understand what factors influence shop owners to choose a service or a product. They were
asked what influenced them to choose a service. They all brought up that Price and Quality were
among the main things that affect while choosing a service.

The shop owners who were interviewed had different views when it came to quality and
price, which they mentioned. Some responded that

“The price and the quality of the product or service should have a balance, because if some­
thing maybe to have a good quality but if it’s too cheap, then the individual will think twice
before buying it. But If it is too expensive with good quality, then the individual will think,
Oh, this is too much for me, I cannot afford it. But if there is a balance, then you reach a
decision where you feel it’s the right decision to make” (Tony)

Other respondents mentioned that “Price and Quality go hand in hand, but the other aspect I
see is how much the person cares about the product or service they are offering” (Mark). Most
of the respondents had a different thing to say about Price and Quality. Some wanted to pay a
high price for the product “Sometimes you have to pay for the high price even though I think I
don’t want to pay for a service or product, it is all about taking the risk and see if it works no
matter the quality” (Maria). It was observed that some respondents mentioned that quality was
what influenced them the most, which was mentioned by John “I think it is the quality which
plays the biggest role. Like, I always compare the quality to the price. If the quality is good, it
doesn’t matter if the price is high or low.”

Another aspect that was mentioned by Linnea “Apart from quality and price I usually see if
we have the same vision and the goal in mind. If they are aligned, then I don’t mind paying the
price even if the quality is good or bad”. It was mentioned by Johan that “Price is what matters
in the end, even if the quality is really good because I have a small business and I don’t want
to have too many expenses.” It was also brought up by (Oscar) that “If the services know what
they are doing and if I believe in them then I don’t mind paying the price.” The factors that
influence the shop owners when choosing a service or product are Price and Quality. They all
mentioned these two factors most commonly, but it is observed that the two factors are perceived
differently by different shop owners. Some of them had the same views on Quality and Price.
But others had one preference over the other. This shows that the decision made while choosing
a service or a product is not based on a single aspect but rather on different characteristics while
deciding.

34
 To understand if the case company understands these factors. LocalDeals was interviewed
to examine the factors that were highlighted during the interview were Price and Quality. The
founder was asked what Value was according to him, and he mentioned that

“ Value, in my opinion, is, in two perspectives, the first perspective is Value could be measured as
financial savings. And the second Value could also be measured as an experience that you get, or the
service that you get all the soft to say, the soft engagements that you have with a customer”

From the interview, it indicates that the case company does understands the factors that influ­
ence shop owners to choose a service by bringing up the term Financial saving and Experience,
which is interpreted as price and quality. Comparing the two perspectives, which is the shop
owner’s perspective and the case company’s perspective, it is indicated that both understand
each other on what influences them while deciding a service.

5.2.2 Trust

The shop owners were asked if they were open to services approaching them. Most of them
brought up one constant word, and that was “Trust”.

The shop owners brought up the aspect of trust when they were asked the question that is
mentioned above. Some responded that

“When someone approaches you, and they say that they can help you with a particular
problem, you will have to check up with some colleagues whether they deal with good
work. We don’t like people coming in and say we can help you with this. And I always say,
okay, no, you must send us information. We must check you up. We do not say, Oh, you’re
welcome. In this way, we are cautious with who we work with” (Tuva)

Most of the respondents had a different thing to say

“If I get an email that, for instance, someone wants to cooperate, or who has a business
offer, then I don’t take it. The most important thing for me is trust, and there must be trust
between the people offering the service and me. They must be reliable, which is important
when you have to make this choice because I’m kind of suspicious of the emails I get from
them” (Tony)

Another respondent said that

“Services, it’s not that there is a service on its own; there will be a man or a woman that’s
going to work for you. And you are going to pay them to do it. If the person is trustful,

35
 good, and honest, and all that stuff, it’s going to be nice. I think it has to do with the person
that is approaching you” (Jacob)

A respondent mentioned his experience with services

“I will tell you what happened with XXX. Okay, because they contacted me and wanted to
help with my business when it comes to marketing. But the catch was that they wanted a
small share in the profits I make, which I felt like I would have no control over my restaurant,
and after that, I always question who is behind the services? are they trying to exploit me?”
(David)

It was mentioned by (Klara) “I am open to services that help my food truck business since
it brings more customers and orders which is needed due to the pandemic and they keep my
business afloat.”

It was observed that most of the respondents were having trust issues with services approach­
ing them. They felt like they must check the information about the company with their friends,
family, or acquaintances. By gaining enough information from them, they felt very confident
with the service companies that approached them. Some respondents are open to services since
it will help their business to grow, but at the same time, they should be trustful in doing so. By
analyzing what they had to say, most of them are a little skeptical when services approach them.

LocalDeals mentioned that

“I have to say because most of them have a service already procured in one way or the other.
People understand when you are running a shop that you cannot do everything by yourself;
that is an ecosystem that you need to tap into. I think customers know about their services,
and they are open to it”

From observing both perspectives, it is evident that some of the shop owners are open to
services which the case company also acknowledges. The fact is that the shop owners have trust
issues, making it harder for service companies to convince them. But at the same time, some
of the shop owners are open to services. While observing both perspectives, most of the shop
owners have trust issues when services approach them.

36
5.2.3 Interactions

In order to understand how interactions, take place, the respondents were asked how they usually
interact with their customers and most of the shop owners had different ways of interacting with
their customers. They brought up the fact that it is really important to interact with customers “I
interact face to face with my customers who come to my store, and I always try to understand
what they are looking for, and by speaking with them and I see what’s their mood, and I try to talk
to them. Because of that, I know their faces and they know me” (Tony). Another respondent
mentioned that there were many platforms to interact with your customers “Honestly I use a
lot of platforms, through WhatsApp, Facebook, Google business, messages or through email
and through our website” (Walter). The platforms that were mentioned by (Walter) was also
the platforms that were used by most of the respondents. These were the tools that were used
when it came to interacting with the customers. The shop owners would promote their products
in theses platforms that have been mentioned. In doing so they find new customers who are
curious to know more about their products. Jacob mentioned that interactions depend mostly on
the culture of the customer.

“When it comes to talking with the customers, I think this depends on the culture of the
customer. For example, I am from Greece and the customers who are Greek call me directly
and the people that are from Sweden have another culture where they send you a mail or
they’re going to write something on your page”

Another respondent mentioned that

“I think a lot of people are using social media nowadays and it’s way cheaper. I pay like 200
crowns for an ad on Instagram and Facebook for a week. But for the local newspaper, I had
this really small ad for one day I had to pay like 3000 crowns and that’s a huge difference”
(Maria)

During the interviews I observed that the shop owners use social media as the main platforms
for interactions to take place. Most of the shop owners were talking about the benefits of using
social media and how it has better reach to the customers. It was also mentioned that social
media was less expensive to use. LocalDeals mentioned that

“ We get to know how they’re thinking about things when you have a person talking to you,
you can understand the background, the story and understand exactly who the person is,
and their needs”

37
 The case company appear to have an understanding of the importance of interactions and
the platforms that LocalDeals is currently using to interact with their customers was mentioned
“The best way to interact with the company is through email. The customers should fill a contact
form that we have on the site. If you are known, then then you have a direct email with a phone
number”. By observing both sides the shop owners have an upper hand by using social media
which makes them more connected and smarter. Because of the number of services that exist in
the market, shop owners can switch platforms easily. It is also mentioned by many respondents
that it is much cheaper to use social media to interact with customers. This makes it a challenge
for the case company to convince the shop owners to use their services.

5.2.4 Marketing

The shop owners were asked what they thought about marketing in general, and they all pointed
out that it is essential for business. The important factor that they brought up when it came to
marketing was “Word of mouth.” They all marketed themselves in different ways, but the shop
owners brought up this term quite often. Walter mentioned that

“Marketing is the important key when you start a business, Like, if nobody sees you that you
don’t exist, even if you physically exist. People must notice that there is a place and when
they do in a couple of months. I get customers that tell me that they have heard excellent
things about the restaurant. In my opinion, word of mouth is the best marketing”

Another respondent mentioned

“I think that the best ways to market are the product of its own, I mean that if someone buys
a product. He/she is satisfied, then we’re very satisfied with the quality of the product. This
is the best marketing more than anything because this person will tell another person, and
again, we tend to tell another person since we are social animals and it’s a good way of
marketing. But the internet also helps a lot” (Jacob )

Most of the respondents felt the same way, and they all brought up that word of mouth is very
important, and they think that having a good product automatically brings in the customers. One
of the respondents mentioned that “The slowest form of marketing is word of mouth. It gives
more trust. Like you might listen to that person. If he or she knows many good restaurants, and
I will listen to them. So word of mouth is significant when it comes to marketing (Maria). It
was also mentioned by (Klara) that “when you make the best falafels for people and after that
people will speak about you, and you will be known.”

38
 One shop owner mentioned that “In the past, it goes from word of mouth. But now young
people have the internet which is faster when it comes to marketing” (David). Most of the other
shop owners that were interviewed brought up the fact that in their experience in marketing,
word of mouth had a massive play in their business. Even though social media had a role to
play when it came to marketing. (Oscar) mentioned that “The customers they have eyes, and by
looking at the work I have done they know it’s from my heart. When you work from your heart
people are happy and when they are happy, they speak with other people”. A generalization that
can be drawn from the interviews is that word of mouth is still important for many shop owners.

LocalDeals mentioned that

“If you’re a big company, you don’t really care about marketing since you will be in the
mind of the people. They know you because of your name, and they will come to you. But
small and medium companies might think a little bit differently because their scopes are
quite niched. Word of mouth is what goes around 90 or 80% of the time. I think what we
can show to the customer is by engaging with us, and You will get a potential customer
base”

Word of mouth is acknowledged by both the case company and the shop owners.The interviews
indicate that customers do recognize which services are authentic. If LocalDeals can convince
the shop owners to engage with them and show them that they care about the shop owners, then
“Word of mouth” can be advantageous for LocalDeals.

5.2.5 Knowledge Gap

The shop owners were asked about services in general and understanding their perspective will
explain how they operate. They brought up that they lacked knowledge when it came to mar­
keting and to know why they did not seek any help even though they realize that they lack in
certain places.

One of the respondents mentioned (Maria) that

“I had to find new ways of finding customers. So, I have been working on a lot on finding
and reaching out to my customers. I managed to increase my revenue. But it could go better
because I am still in the beginning stages, so I need to push it even harder, and marketing
is hard, and that is something that I need to work on”

Another respondent mentioned that “It’s more of the reputation that you uphold. And that is not
something you can get with marketing. You have to have a good reputation within the area, and
that works most of the time in my opinion” (John).

39
 It was observed that the shop owners do understand that marketing is not their strong suit.
One of the respondents mentioned that “I’ve been doing all the bookings and marketing by
myself.” Another respondent said that “Since I am a hairdresser, I need to show that my work is
good since this is beauty and art. I need to market my skills, and I do that through social media,
and I try my best to promote my work” (Oscar). It was mentioned by (Klara) that “I know I need
help in marketing, but I don’t need that help because I have two best friends who help me with
what they know about advertising and marketing.”

After the shop owners were interviewed, it was observed that they brought up this word quite
often, and that is “I.” Most of the respondents acknowledge that they lacked knowledge when it
came to marketing. But despite the shop owner’s acknowledgment, they take matters into their
own hands without seeking help from others. This creates a layer of ego where the shop owners
think they can do it better than anyone else. By closely looking at this layer of ego, it will create
a perception that the shop owners do not need services in general to help. Because in the shop
owner’s perception, they think they can do a better job despite the knowledge gap, which creates
a challenge for providers.

LocalDeals mentioned that

“I researched a little bit on the challenges that are faced by the shop owners in general. I
found out that many shops are being closed because they have trouble competing with the
digital marketing tools that are around. I thought about it and realized it would be perfect
to have this service for both the physical shop owner and the end customer”

By observing both sides, the case company hasn’t recognized the existence of the layer of ego,
which was observed from the shop owner interviews. The founder mentioned that many shops
are being closed because shop owners have trouble using various tools. This is confirmed by the
shop owners, who acknowledge that they need help in marketing. Despite the lack of knowledge,
the shop owners still think that they can do everything on their own, making it hard for service
provider to approach them.

40
5.2.6 Open to Collaboration

To understand if the shop owners are open to working with providers, they were asked if they
had any experience working with providers. Doing so helped me know if they have ever worked
with services and their perspective on collaboration. The shop owners pointed out that it is very
important to be involved together. One of the shop owners responded that

“I work with some post services, other than a shop, it is also a pickup delivery spot for many
post­service companies. They are the ones that bring in a lot of customers. For instance, if
some other post company or some other post­service wants to cooperate, and then I will be
open to services that bring customers” (Tony)

Another respondent mentioned that

“When I opened my restaurant, I first started up with Foodora and Uber eats. If there is
something in it for me to make a profit, then I’m surely down for working with services.
Some young boy told me he was starting an application, and he asked me if I can I sell your
stuff? And I replied by saying, of course, if you are going to make a profit, I will also make
a profit” (Walter)

From the interviews, it was observed that some of the shop owners have collaborated with ser­
vices to improve their business in the past. But they never worked with the services together to
a common goal. One respondent mentioned that “From my experience, we don’t work together
much actually. It’s like, everyone is by themselves, and for what you pay you to get, but I am
open to working with them” (John).

Another shop owner mentioned his experience working with services. He said that

“I haven’t worked with any services together. If something comes up, I will consider it. The
only time I did was when I had a person who asked me to cooperate with them. They were
transporting bikes that would pick up the bike from the customer that was damaged and drop
it off at my bicycle shop. We had a little meeting. I came up with some of the problems
that I see with our corporation. When I was fixing the bike, I saw other problems it had,
and my issue was that there were too many people mixed in the process and it easier for me
to have contact with the customer directly rather than talking to a middleman” (Mark)

From the interviews with the shop owners, most of them pointed out that they were willing
to work with services and if services have their best interest in mind. If they do not feel like they
are getting anything, they do not feel like collaborating.

41
 Maria mentioned that “I hope they listen when they want to collaborate. This is what I think
when it comes to working with services. Otherwise, I would be very disappointed if the services
are going to be like, we’re going to do our way”. From observing the interviews, they are open
to collaborating with services if they can be transparent and involve the shop owners in a way
that they feel like they are getting something in return.

LocalDeals mentioned that

“The emotional experience that you experience if you’re on the phone or face to face con­
versation with the customer directly is important. And in doing so, it is more valuable to
them than the fiscal experience. By engaging with us, we can show the customer the value
that our service brings”

The shop owners are open to collaboration if services can be transparent with them, as the
Founder mentioned that by engaging the customers with their service, they could show them
the value they get out of it. Most of the shop owners felt like the services did not have their
best interest or listened to them when it comes to their wants and needs. Some shop owners
already have had a bad experience with services but not all of them because some of the other
shop owners felt that services helped their business. By observing the interviews by engaging
the shop owners, it will help them decide if they need the assistance or not.

5.2.7 Customers

To understand customers from the shop owner’s perspective, they were asked the key challenges
in working with customers. They all pointed out that when it comes to their business the most
important thing is the customer. One respondent mentioned that “Badgering the customer, re­
minding all the time about the service. And I know that most people like offers and discounts
and everything. For me, it is important not to have a one­time customer, and it’s important to
have a good customer that will come back again” (Tuva). Another respondent also mentioned
that “The mistake that people usually do is that they think customers are dumb. But they are
smart, and you have to honest with your customers” (Walter). When the respondents were asked
about their customers, many of them brought up the fact that the customer is the most important
thing when it comes to running a business. When you don’t understand them, it won’t be good
for your business it was mentioned by Mark

“If you visit the place and if you are satisfied with the place you’re coming back next time,
and you might come back with your friend or someone else and in the end, it’s the customer
who has to pay. Always it’s the customer that has the power to choose. Otherwise, you will
go out of business.”

42
 It was observed that some respondents mentioned that

“You will reach a point like you want to listen to your customers, but I’ve learned that the
hard way. They can be like; you should have this and that. And they will be like planning
your store. In the end, it is your business. You will see what works and what does not work.
I have customers who want a specific product. In the end, they don’t buy it” (Maria)

This was also brought up by other respondents where they mention that they had people coming
in and demanding things that they wanted. Sometimes it wouldn’t even sell because it is just one
customer who requested the product. Another respondent mentioned that it is hard to understand
each customer

“The only difficulty is to find out what exactly the customer like so from the first time of
meeting it’s hard to, to find out find what type of nails they would like to do and what they
usually like or not. But then with then, when you are talking more with the customer, you
see their hobbies and everything and you will know” (Linnea)

A generalization that can be drawn from the interviews is that the shop owners understand
how important the customer is really to the business but at the same time, it was mentioned by a
respondent that they don’t want every single customer in town “Everyone’s going to go for the
number of customers that the business will bring. But for me, it is always tricky. I don’t want all
the customers; I want a few customers, and it is good that they understand why they’re coming
to my shop” (Mark). Another respondent mentioned

“We get lots of customers who come in to get some advice about the plants or how to treat
the flowers. And it is important to us to give the right type of advice to the right customer.
And I think that is very important for us. But it won’t give us any fast money we prefer to
work that way” (Tuva)

Some of the respondents felt that they do not want all the customers, but at the same time,
the shop owners want customers that value their products .

LocalDeals mentioned that “I’ve tried to reach out small business owners online and then
through networks on Facebook, and networks through friends of friends. I have found out or
find the current small base that I have, which don’t operate on physical stores, but they have
their own business. This was done to experiment on the concept”.

43
 LocalDeals also mentioned

“The Facebook groups are formed through causes. Some of the group names are small
business owners of Stockholm, small business owners of Sweden, marketing help for small
business owners in Sweden etc. But then they use this platform to kind of communicate to
each other of their products and services”

Observing the interviews, it is evident that most shop owners think differently about their
customers and how they understand them. The case company only captured a glimpse of it
through Facebook groups. To generalize how shop owners think about their customers is unique
in their own way.

5.2.8 Promises not Delivered

During the interview, the shop owners who had experience with service brought up the fact that
some services that approached them did not deliver what they promised to help them. One of
the shop owners mentioned that

“It doesn’t matter what they promise, what they deliver, what you ask for, what they promise,
what they understand, and what you pay for, And what you get is completely different,
which is 99% of the times” (Mark)

Another respondent mentioned that “Services are going to exaggerate a lot by advertising
themselves” (John). Most of the shop owners felt that services were advertising their products
a lot. It was observed that some shop owners had a good experience with the service provided
to them but not all of them.

Some shop owners brought up the fact that some of the services they had used did not deliver
precisely as they wanted. It was mentioned by (Johan)

“The service which designed the logo for my business didn’t listen to what I wanted, when
designing I wanted this particular look for my business logo, and they sent me something
else. The service company kept saying that they knew better, and I had to argue with the
company to change as per my liking”

Another respondent mentioned that

“Many services come here to saloon saying that they will help in marketing, I realized that
they don’t know how to market, and they approach and take your money and after they
get what they want and they leave. They don’t help the customers at all. So, from my
experience, they want your money, and they don’t care about my business” (Oscar)

44
 Most of the respondents felt the same way, and it is observed from the interviews that the
shop owners already have a perception of services in mind, but some of the shop owners have
had a good experience with services. But most of them were annoyed with the services that had
approached them.

One of the respondents mentioned that

“Services do not deliver what they promise, and I have a hard time reaching them. I want
them to reach out to me when I contact them. I run a business. I can’t be like calling a
company like three, four times a day when I have so many things to do in the restaurant”
(Walter)

From observing the interviews, most of the respondents have had a bad experience with services.
They were promised something in the beginning, and later they do not deliver what they promise.
The shop owners were very irritated in general when services were wasting their time. The shop
owners have created this perception in mind. It was also mentioned that some services think
they have the resources to do a service but, they do not have the caliber to do it. By taking all
of this into consideration, it is observed that the shop owners are disappointed.

LocalDeals said, “The company’s vision is to help businesses that are small and medium to
grow together.” The founder said that “LocalDeals tries to enhance the shop owner’s visibility
towards their customers and LocalDeals tries to do this by promoting the campaigns and the
promotions that the physical stores have already.” The mentioned quote is the promise that
the case company promises the shop owners when they approach them. Shop owners, however,
reveal that their experience with providers of digital marketing services is one of disappointment.
The question that comes up by observing the interviews from the shop owners is, “Will the case
company deliver what they promise?” Most of the shop owners had to argue with services to
get their needs met. The shop owners felt that services do not deliver what they promise. Many
shop owners mentioned that they felt that most of the services that approached them did not have
the resources to help them. Taking a step back and analyzing the service company’s resources
will help LocalDeals see if they can help the shop owners in reality.

45
6 Discussion

This study aims to understand how Value can be co­created for the shop owners of Uppsala.
This was achieved by reading various literature on three concepts: Digitalization, Value, Value
Co­creation.

The various literatures identified on the concept of digitalization were mentioned in the
study’s literature review section. The study by Ritz et al. (2019), Cole et al. (2017), Yasmin et al.
(2015), and Alford and Page (2015) indicated that small business owners are highly motivated
to use digital technologies to make their business more efficient which led to the first research
question: How do small businesses perceive digital marketing?

The themes identified to understand how digitalization is confronting small businesses are
Trust, Knowledge Gap, Promises not delivered, marketing, and open to collaboration from the
empirical findings. Ritz et al. (2019) mentioned that the participation by the shop owners is
related to a sense of control which was a significant factor in their result. It is evident from
the theme Trust that one of the shop owners was approached by a firm that was associated
with helping in digital marketing for the restaurant. The firm wanted to get a percentage of the
profits from the restaurant. Because of that, the shop owner felt that he was losing control of
his restaurant. So by outsourcing their digital marketing, the small business lose control. In the
themes promises not delivered, most of the shop owners had to argue with services to get their
needs met, and services were not listening to their wants and needs, which shows that the shop
owners felt they were losing control of their vision of their business. The authors pointed out
that the shop owners were motivated to adopt digital marketing by themselves. It can be seen
from the identified theme Knowledge gap that the shop owners adopt digital marketing tools by
themselves. They need help to run their business and have realized that they lack knowledge
about digital marketing. Because of that, the case company LocalDeals and other startups have
started various services to help small businesses. However, it is evident from the findings that
the Shop owners take matters into their own hands and adopt digital marketing themselves (Ritz
et al., 2019).

The study by Cole et al. (2017) claims that social media has enabled small businesses to
promote themselves to reach their customers. This is evident from the theme marketing. The
small business uses social media to promote their work and were very happy with the social
media results. The author claimed that education played a role in the interest of small business
owners towards advertising. They claimed that the higher the education level, the less open they
were to digital marketing. This can be argued that it could be one of the factors. However, most
shop owners were open to collaborating with services from the theme open to collaboration,
but the bad experience they have experienced before plays a significant role (Cole et al., 2017).

46
Grönroos (2006) pointed out that the company needs the resources to run the company and
invent new ways to facilitate Value . This can be argued that the shop owners are not getting
any deal out of services which is evident from the findings. Because of that, the Shop owners
take matters into their own hands since they feel that they can do a better job than the firm.
The author mentioned that when customers interact with services and consume their service, it
affects the firm’s perception, and because of the Value Co­creation can be achieved. This is true
because some shop owners had a positive say about how services are helping them run their
business (ibid.).

Yasmin et al. (2015) mentioned that small business has recognized the importance of adopt­
ing digital technologies. They claim that it is less expensive for small business to promote their
product, which is evident from the theme of the interaction that it is less expensive for small
businesses. From the marketing theme, it can be seen how much social media has impacted
small businesses, and in doing so, they have found different ways to promote themselves (Yas­
min et al., 2015). Alford and Page (2015) mentioned that small businesses had a high interest in
forming relationships and collaboration. From the theme open to collaboration, they are open
to collaborating if services can be transparent. If they feel like they are getting something out
of the collaboration, then relationships can be formed (Alford and Page, 2015).

To answer the research question, it is seen that digitalization is adopted in small businesses
in the form of social media when it comes to digital marketing, and this is how small businesses
are being confronted. The small business owners are open to collaborating with startups and
firms that want to help in digital marketing but only If they can be transparent with them, and
the business owners should feel that they are in control and are getting their needs met.

The concept of Value was disscussed in the theory section of this study. In doing so, the
study by Menon et al. (2005) led to a research question: How important is trust to the customers
of digital marketing providers?

From the empirical findings, it is evident that trust plays a huge factor while choosing a
service; the themes identified that are relevant to answer this research question are Price &
Quality, and Trust. According to Menon et al. (2005), they point out that the term trust is very
effective in today’s market despite the competition. And it has an overall positive impact on the
various fundamental needs that the customer expects from the supplier. The author believes that
the supplier always performs by keeping the customer’s best interest in mind. In doing so, the
customer who trusts the supplier will have lower costs.

47
 While analyzing the themes from the empirical findings, it is evident that trust plays a signif­
icant role while choosing a particular service from a provider. Trust influences the decisions that
are made by the shop owners when selecting a service. Trust positively impacts customers’ ex­
pectations in today’s competitive world, which is evident from the findings presented by Menon
et al. (2005). The authors’ belief, which keeps the customer’s best interest in mind, is open to
criticism based on the findings. Many of the respondents had trust issues because they felt that
they had to take matters into their own hands to research the supplier. Based on the findings,
the customers do not believe that the supplier has the best interest in mind. If they did have their
best interest, then the shop owners would not second guess various services that approached
them.

One of the findings that were pointed out by Menon et al. (2005) is that when there are
added benefits, it influences the customer value that the customer receives. They also pointed
out that their findings suggested that high­quality products are more influential than the benefits
and Price offered by the supplier. Based on the findings, some of the respondents had different
views regarding Price and quality. So having higher added benefits will increase the chances
of the customer choosing the service that is offered. It is one of the factors that influence shop
owners, but it is not the only factor. Since many respondents had different views regarding
choosing a service, it is evident from the findings that Price and quality are not the only factors.
More than the benefits of the service the customers receive, the main factor that is evident from
the finding is trust. Which is pointed out by the authors that trust is a strong driver when it comes
to business relationship and doing so, both parties do benefit from the relationship. If Trust can
be brought into the relationship, doing so can improve the shop owner’s overall services. It is
evident from the findings that trust is essential for the shop owners. But at the same time, since
the shop owners are skeptical of the services provided to gain trust from the shop owners is
going to be a challenge to suppliers (ibid.).

Theoretically, trust is complex to explain, and the benefits both the parties get out of the rela­
tionship. But empirically, the shop owners do not trust the service providers, which forces them
to comply with the shop owners. In complying with the shop owners, it can lead to having fewer
benefits that the service providers receive. To answer the research question, trust is crucial for
the shop owners, and if services can bring in the trust factor to the shop owners only, then Value
can be achieved. To generalize the concept of Value, Paananen and Seppänen (2013) suggest
that it is easier to describe the idea by having a human perspective. Having an interpretive view
while conducting this study, Value can be achieved if the customer perceives Trust.

48
 The concept of Value Co­creation was discussed in the theory section of this study. The
studies done by Prahalad and Ramaswamy (2004) and Grönroos (2011) pointed out that inter­
actions are essential in a relationship and without understanding the importance of interactions,
it can lead to firms going out of business and it cannot lead to any creation of value which led
to the research question:How do digital marketing providers interact with small businesses?

From the empirical findings, the themes identified to understand the nature of interaction are
Marketing, Customers, and Interactions. The study carried out by Prahalad and Ramaswamy
(2004) points out that the traditional way of Value Co­creation is changing from company­
focused products and services to consumer­focused services. They point out that the leading
cause of this change to happen is informed consumers. Consumers are questioning the com­
panies’ motives by analyzing and evaluating their products and services. And this is because
consumers are empowering themselves by constantly learning new things. In doing so, they
can question companies about their motives. This change can be observed in the interaction
theme, where the shop owners are using social media as their primary platform to promote their
products. They are more connected because of various social media platforms, and most of
the interactions between their customers take place using such media. It is observed that the
shop owners are also trying to learn new ways to make their business better, which is evident
from the Marketing theme. It is observed that shop owners are connected and more informed
by empowering themselves to learn new ways, and this change was pointed out by the authors.

When a service approaches the shop owners, the owners ask around about the services of­
fered from the contacts they know to gain confidence. Prahalad and Ramaswamy (2004) men­
tioned that consumers communicate with other consumers to gain information and have a per­
spective on the service provider. By finding other sources for acquiring knowledge, the shop
owners can choose which service they want to have a relationship with their business. The
theme Open to collaboration shows that the shop owners are open to collaborate with the ser­
vice provider only if they have their best interests in mind. The consumers view the relationship
they want to have with a company based on the Value created for the consumer (Prahalad and
Ramaswamy, 2004).

Grönroos (2011) mentions that when the company understands how interactions happen,
the firms can engage themselves with the consumer and create Value by collaborating. The
themes identified for answering the research question show how interactions occur between the
shop owners and their customers and the tools used for exchanges to occur. Understanding
the nature of this interaction process between the actors will help Local deals to understand the
shop owners. The author mentions that interactions can influence how the firm and the customer
work.

49
 Interactions occur through Social media, face­to­face conversation, and Word of mouth, and
this can be observed by the four themes mentioned in the empirical findings. Social media was
the platform that the shop owners used to promote themselves so that new customers can reach
out to them. Face­to­face conversations with the customers helped the shop owners understand
their customers. Word of mouth is considered the best form of marketing and a source for finding
more information about a company or product (Grönroos, 2011).

The four themes show that understanding how interaction happens will give a view to Lo­
calDeals on how Value can be co­created for the shop owners. Interaction is significant to under­
stand the concept of Value Co­creation. The company can understand by learning the nature of
interaction to help the company manage how they interact with the shop owners. The nature of
the interaction is through social media, Face­to­face conversation, and Word of mouth to answer
the research question. Understanding this nature of interactions between the shop owners and
the actors of interest and by doing so, Value can be co­created by the firm and the shop owners
(ibid.).

By understanding the three research questions, you can discuss the Value creating spheres
presented by Grönroos and Voima (2012) in Fig 1. The figure consists of three spheres: the
provider sphere, Joint sphere, and Customer sphere. These spheres have been discussed in the
theory section of this study and examining them empirically will explain how the spheres work
in general.

1. Providers Sphere

In the provider’s sphere, it is pointed out by Grönroos and Voima (2012) that the firm is
always in charge of the process (Grönroos and Voima, 2012). This is the sphere where the
provider creates various services that are going to be used by the customer. By answering the
research question, you understand if firms are providing the necessary resources to create Value
for the customer (Grönroos, 2008)

RQ 1 How do small businesses perceive digital marketing?

Digitalization is adopted in small businesses by social media and digital services when it
comes to digital marketing. This is how small businesses are being confronted by digitalization.
Small business owners recognize the benefits various digital marketing tools can bring to their
business and are open to collaborating with startups and firms. If the case company can make
the business owners feel that they are in control of their business and get their needs met, and be
transparent with them, then adopting a digital marketing service will be more efficiently adopted.

50
 2. Joint Sphere

Grönroos and Voima (2012) mentions that the joint sphere is the sphere where the customer
and the firm interact. This sphere is essential because by observing how interactions occur can
positively or negatively impact the value creation process. If interactions do not happen, then
Value cannot be co­created (Grönroos and Voima, 2012). By answering the research question,
you understand the nature of interactions and how the shop owners interact with various actors.

RQ 3 How do digital marketing providers interact with small businesses?

The nature of Interactions occurs through Social media, face­to­face conversation, and Word
of mouth. Social media was the platform that the shop owners used to promote themselves. Face­
to­face conversations with the customers helped the shop owners understand their customers.
Word of mouth is considered the best form of marketing, and it is also a way for the shop to
find more information about a company. These are ways in which interactions take place, and
by understanding them, Value can be co­created for the shop owners.

3. Customer sphere

In the customer’s sphere, it is pointed out by Grönroos and Voima (2012) value emerges
through the experiences provided by the resources provided by services. It is also the sphere
that has been recognized as important but previously it wasn’t considered important (Grönroos
and Voima, 2012). By answering the research question, you understand what is essential in the
customer sphere.

RQ 2 How important is trust to the customers of digital marketing providers?

Trust is essential for the shop owners, and it is evident from the findings that it is a vital
aspect for the shop owners. If the case company can achieve trust and convince the shop owners
only then, Value can be co­created for the shop owners, but at the moment, the shop owners
do not trust the service providers from their past experiences, which is a challenge for the case
company to provide the experience that the customers expect. If trust can be brought by actually
delivering what is promised then Value is achieved.

51
7 Conclusion

The study aims to explore the connection between digital marketing service providers and small
businesses. The results show that the small business owners in Uppsala do not trust digital
service providers, and this is because digital service providers have not delivered what they
have promised. They are perceived as wasting the time of small business owners. Many small
business owners are disappointed with digital service providers because they do not have the
necessary resources to help small businesses. That is the reason why they are skeptical about
digital service providers. The digital service providers are not perceived to benefit the shop
owners, which forces the shop owners to develop other means to enhance their business. Also,
many small business owners had to argue with service providers to get their needs met.

If LocalDeals can be fully transparent with the shop owners by being honest about their
strengths and weaknesses can help the case company develop trust with the shop owners. In
doing so, the small business owners will be more willing to collaborate with the case company
because they are perceived to be more trustworthy. But the main thing for LocalDeals is to take
a step back and analyze if they have the time and resources to help the small business owners.
Suppose the case company develops trust with the small business owners and does not have the
necessary resources to help them. In that case, the business owners will be disappointed again,
and faith in digital service providers will be lost. It is crucial for LocalDeals to internally check
if they have the resources to help the shop owners. If they develop trust and have the necessary
resources to support the owners, it can help the case company co­create value with the shop
owners.

The literature review on Digitalization helped me understand how small business owners
perceived digital marketing from an empirical setting. The theory of value helped in under­
standing the concept of value from an empirical perspective. The concept of value has many
ways of interpretation, which is evident because each time a researcher does a paper on value, it
is interpreted differently. From an empirical point of view, value can be defined as what an indi­
vidual can do to help others. The theory of Value Co­creation helped understand the importance
of involving the consumer in the development process. In doing so, the consumer and the digital
provider work together towards a common goal. These theoretical perspectives were selected
to assist in understanding the roles of digital service providers in the market. Understanding
the value­creating spheres from an empirical setting helped unite the concept of Digitalization,
value, and value co­creation.

52
Theoretical Implication

This study contributes to the studies aimed at digitalization and small businesses. It provides an
empirical perspective on how digitalization is being adopted by small businesses. The results
that have been generated will help researchers understand digitalization, digital marketing and
small businesses. The information can be used by other digital marketing companies who want
to understand how small businesses operate. Using the literature review on digitalization and the
theory of value and Value co­creation helped in understanding on how digitalization is meeting
with small businesses. Researchers can use the framework proposed by Grönroos and Voima
(2012) to understand the roles of digital marketing companies and customers. Future research it
is suggested to conduct this study in the form of a quantitative analysis with larger sample size.
Since this study is limited to 12 small businesses, it is necessary to explore with a bigger sample
size to understand digital marketing and small businesses more in­depth.

Societal and Ethical implications

In conducting this study, it was observed that the information from this study, can be used by
companies and startups to develop digital marketing services that can be valuable to the cus­
tomers. In doing so, the customers feel that they are being heard by companies. Also, it will
help companies to come up with various strategies to help them organize and make changes to
their existing business models. The information in this study can be used as a tool to manipulate
small businesses to sign up with various digital marketing services and exploit customers. If
companies do not have the appropriate resources can lead to a leak of information which can
cause privacy and security issues for customers. The companies will have the power to help
customers and also have the power to use it against them which can potentially cause harm to
the customers.

53
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9 Appendix

9.1 A

S.no Questions
1 Would you like to introduce yourself?
2 How do you find your customers?
3 How do you do your advertising?
4 What marketing /advertising has worked for you
in the past?
5 How is business?
6 What are the key challenges in working / finding
customers?
7 What are your thoughts on marketing?
8 How do you usually interact with customers?
9 What do you think is important when it comes
to marketing?
10 What do you think that does not work when it
comes to marketing?
11 Are you open to services that would help your
business?
12 What challenges do think arises when you think
about services?
13 Have you had any past experiences with ser­
vices?
14 What factor plays a role when choosing a ser­
vice?
15 Do you usually work with services to improve
your business?
16 Do you usually work with services to improve
your business?

Table 9: Interview Questions (Shop Owners)

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9.2 B

S.no Questions
1 Would you like to introduce yourself?
2 What is customer value according to you?
3 What values do you think is important as a ser­
vice provider for customer?
4 What is the service that local deals provides?
5 Describe how the company work with cus­
tomers?
6 What are the key challenges in working with
customers?
7 Describe how would you work with customers
to bring the best potential value for their busi­
ness?
8 How do you usually interact with customers?
9 What is the best way for LocalDeals to interact
with the customers ?
10 What is the best way for business to interact with
a service provider
11 Do you think communication is important and
why?
12 Do you have anything to add apart from these
questions? and any questions for me?

Table 10: Interview Questions for the founder of LocalDeals

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